Wednesday, February 18, 2015

#1 with a Bullet: Enfield shoots past Harley

A lot of people in India want to get on a new Royal Enfield.
According to Forbes Asia, Royal Enfield has outsold Harley-Davidson for the first time. Figures for 2014 suggest that Enfield sold over 300,000 bikes, compared to about 270,000 for Harley.

Harley's net income is still about twice Enfield's, mainly because the cheapest Harley's about twice the price of the most expensive Enfield. But, Enfield's passing Harley in the number of units sold does illustrate the fact that in the developing world in general (and India in particular) more and more people can afford motorcycles. By contrast, it seems that fewer and fewer people can afford them here in the U.S.

Harley's response has been to produce the Street 750 and 500 models, which are 'world' bikes—they don't expect to sell many of them in the domestic market. But even a 'cheap' Harley is expensive by developing-world standards. A new Street 500 in India will set the buyer back about Rs. 400,000. That puts it well into the range of new cars in India. What that means is that even in places where motorcycles are purchased as functional transportation, even the cheapest Harley will be sold to people choosing it for a reasons that have little to do with functionality.

The Forbes story reminded me that Enfield's a subsidiary of Eicher Motors, a company that manufactures and sells Volvo heavy trucks and buses in the Indian market. Eicher's also got a joint venture with Polaris, which in a roundabout way means that Indian (as in 'brand') is now a cousin of the most famous Indian (as in 'subcontinent') motorcycles.